I’m pleased to highlight recent faculty research published in top academic journals:
Zhi Da, Howard J. and Geraldine F. Korth Professor of Finance
Short selling efficiency (Journal of Financial Economics)
We propose a new variable called short-selling efficiency (SSE) to measure whether short sellers devote more capital to more overpriced stocks. We show conceptually and empirically that SSE has favorable predictive ability over aggregate short interest, as SSE reduces the effect of noises in short interest and better captures the amount of aggregate short-selling capital devoted to overpricing.
Short selling efficiency (Journal of Financial Economics)
We propose a new variable called short-selling efficiency (SSE) to measure whether short sellers devote more capital to more overpriced stocks. We show conceptually and empirically that SSE has favorable predictive ability over aggregate short interest, as SSE reduces the effect of noises in short interest and better captures the amount of aggregate short-selling capital devoted to overpricing.
Paul Gao, Professor of Finance
Good for your fiscal health? The effect of the affordable care act on healthcare borrowing costs (Journal of Financial Economics)
Since its passage in 2010, the Affordable Care Act (ACA) has grown to provide health coverage to more than 31 million people (including the Medicaid expansion) and survived three challenges before the Supreme Court. We use the health-care municipal bond market to study hospital credit risk around the implementation of the ACA. Health-care providers issued significant municipal health-care bonds — the primary source of financing for nonprofit hospitals, which represent about 70% of all hospitals in the U.S. We show that the ACA significantly reduced hospital credit risk. The immediate yield change represents $360 million in aggregate interest savings on all health-care municipal bonds issued from mid-2012 to 2015.
Hong Guo, Professor of IT, Analytics, and Operations
Xuying Zhao, Associate Professor of IT, Analytics, and Operations
The Role of Expectation‐Reality Discrepancy in Service Contracts (Production and Operation Management)
Service contracts are common practice in some industries while being eliminated in others. To investigate this phenomenon, we identify expectation–reality discrepancy (ERD) as a key determinant. A provider's ERD is defined as consumers’ ex-ante expected valuation minus their ex-post realized valuation of the provider's service. Our analysis reveals that providers’ contract strategies critically depend on their ERDs rather than the true service valuations.
Ann Tenbrunsel, David E. Gallo Professor of Business Ethics
The Opportunities and Challenges of Behavioral Field Research on Misconduct (Organizational Behavior & Human Decision Processes)
Research on behavioral misconduct and ethics across many fields has provided important managerial and policy implications, but has primarily relied on laboratory experiments and survey-based methods to quantify and explain predictors of and mechanisms behind such behavior. This introductory article in a special issue devoted to field studies of unethical behavior goes beyond summarizing the articles by offering a methodological classification of field research on misconduct, discussing the challenges facing behavioral field studies and identifying the tools that might mitigate them. Our goal is to provide a foundation that helps build a cross-disciplinary, integrated view of the field evidence on behavioral misconduct as well as to encourage future work that employs the best empirical practices.
Joonhyuk Yang, Assistant Professor of Marketing
Commercial Success Through Commercials? Advertising and Pay-TV Operators (Journal of Marketing Research)
The study examines the role of advertising in the growth of direct satellite services (such as DirecTV or Dish Network) in the U.S. pay-TV service market that was dominated by cable operators until the 1990s. In particular, the study provides evidence that a form of advertising scale economies was in effect as the unit costs of local advertising tend to be higher than those of national advertising, which likely allowed the satellite operators to better leverage their national presence with (cheaper) national advertising. Overall, this study highlights the interaction between advertising efficiencies and the scale of entry in explaining the competition between market incumbents and entrants.
Good for your fiscal health? The effect of the affordable care act on healthcare borrowing costs (Journal of Financial Economics)
Since its passage in 2010, the Affordable Care Act (ACA) has grown to provide health coverage to more than 31 million people (including the Medicaid expansion) and survived three challenges before the Supreme Court. We use the health-care municipal bond market to study hospital credit risk around the implementation of the ACA. Health-care providers issued significant municipal health-care bonds — the primary source of financing for nonprofit hospitals, which represent about 70% of all hospitals in the U.S. We show that the ACA significantly reduced hospital credit risk. The immediate yield change represents $360 million in aggregate interest savings on all health-care municipal bonds issued from mid-2012 to 2015.
Hong Guo, Professor of IT, Analytics, and Operations
Xuying Zhao, Associate Professor of IT, Analytics, and Operations
The Role of Expectation‐Reality Discrepancy in Service Contracts (Production and Operation Management)
Service contracts are common practice in some industries while being eliminated in others. To investigate this phenomenon, we identify expectation–reality discrepancy (ERD) as a key determinant. A provider's ERD is defined as consumers’ ex-ante expected valuation minus their ex-post realized valuation of the provider's service. Our analysis reveals that providers’ contract strategies critically depend on their ERDs rather than the true service valuations.
Ann Tenbrunsel, David E. Gallo Professor of Business Ethics
The Opportunities and Challenges of Behavioral Field Research on Misconduct (Organizational Behavior & Human Decision Processes)
Research on behavioral misconduct and ethics across many fields has provided important managerial and policy implications, but has primarily relied on laboratory experiments and survey-based methods to quantify and explain predictors of and mechanisms behind such behavior. This introductory article in a special issue devoted to field studies of unethical behavior goes beyond summarizing the articles by offering a methodological classification of field research on misconduct, discussing the challenges facing behavioral field studies and identifying the tools that might mitigate them. Our goal is to provide a foundation that helps build a cross-disciplinary, integrated view of the field evidence on behavioral misconduct as well as to encourage future work that employs the best empirical practices.
Joonhyuk Yang, Assistant Professor of Marketing
Commercial Success Through Commercials? Advertising and Pay-TV Operators (Journal of Marketing Research)
The study examines the role of advertising in the growth of direct satellite services (such as DirecTV or Dish Network) in the U.S. pay-TV service market that was dominated by cable operators until the 1990s. In particular, the study provides evidence that a form of advertising scale economies was in effect as the unit costs of local advertising tend to be higher than those of national advertising, which likely allowed the satellite operators to better leverage their national presence with (cheaper) national advertising. Overall, this study highlights the interaction between advertising efficiencies and the scale of entry in explaining the competition between market incumbents and entrants.
Thank you, Zhi, Paul, Hong, Xuying, Ann and Joonhyuk, for your efforts to advance your disciplines and our research reputation.
In Notre Dame,
Martijn